The CEWS is only available in respect of an employee if “remuneration” was paid to that employee. Eligibility for the TWS is more limited than the CEWS—only individuals, certain partnerships, non-profit organizations and registered charities, and Canadian-controlled private corporations eligible for the small business deduction can apply. This applies to any amounts that would have been owing on or after March 27, 2020 and before June 30, 2020. Therefore, under the agreement, the rental costs will be allocated in the following manner: In order to qualify for the CECRA, a commercial property owner must own commercial real property occupied by “impacted small business tenants” and must enter into a legally binding rent reduction agreement that reduces an impacted small business tenant’s rent by at least 75%.
The deadline to opt-in for the final September rent assistance is October 30, 2020. On September 23, 2020, the government announced that it is proposing to extend the CEWS until the summer of 2021. Applications for the CECRA are now available through the Canada Mortgage and Housing Corporation (CMHC). Impacted small business tenants are businesses paying less than $50,000 per month in rent, generate no more than $20 million in gross annual revenues, and have experienced a decrease in pre-COVID-19 revenues by at least 70%. Applications for this benefit are completed through the CRA website. The CRA has released the following webpage on the CEWS, which provides helpful information for employers to determine whether they are eligible. The CEBA will provide loans of $40,000 to qualifying Canadian operating businesses who require additional credit because of COVID-19. It is a loan guaranteed by the government of Canada. For more information and to apply for the subsidies, please visit the Government of Canada website. The CEBA loan is one of the many ways we’re supporting them – and with almost 670,000 businesses across the country benefitting from this lending support, we know it’s making a real difference for people. He also paid $600,000/year in dividends to himself in 2019. Therefore, some of the details here may fall out of date. Three additional recovery benefits were proposed for individuals who continue to require income support after the CERB ends but may not be able to transition to EI. Transfer Personal Assets. For owner-managers, remuneration does not include dividends. Note that any TWS claimed in a period will reduce any CEWS receivable for the same period. Shareholder Loans. The reduction in remittances only applies to income tax, not to other withholdings such as CPP and EI. The application is available through CRA My Business Account. The deadline to submit new applications to CMHC is September 30, 2020. Self-employed individuals are now also eligible. Relevant changes are intended to allow more individuals to access EI and include: Please refer to the Employment Insurance website for further details on how to apply for EI benefits. Important features of Canada Emergency Business Account (CEBA) are: Instant access to a loan of $40,000; One by fourth of this loan can be forgiven. Income Splitting . The maximum subsidy per employee for the first 4 claiming periods is $847 per week, with no cap at the employer level. This program provides interest-free loans of up to $40,000 to small businesses and not-for-profits that carry on active business activities to help cover non-deferable operating costs during a period where revenues have been temporarily reduced.If the balance of the loan is repaid on or before December 31, 2020 25% of the loan … An employer applies for the subsidy for each claiming period. Continue Reading. CEBA loan is interest-free for the first year. The webpage also includes a calculator that employers can use to determine how much the subsidy may be. Eligible businesses must have a business operating account at a financial institution and a Canada Revenue Agency business number, and must have filed a 2018 or 2019 tax return. The economic impact of the COVID-19 pandemic is being felt widely throughout the business community and has prompted the federal government to propose several financial support measures. On top of the CEWS, an employer may be able to receive a 100% refund of employer contributions to the following plans for employees on leave with pay: It is important to note that the employer must actually pay their employees first. A business operating account at a participating financial institution. Andrew Marsh, President & CEO of Richardson GMP has written a message to clients to inform them of the measures our firm is taking in response to COVID-19 to prioritize the health and safety of our Clients, Advisors and all Employees. Therefore, owner-managers who historically only pay themselves dividends from their corporation, rather than salaries, cannot claim the CEWS in respect of those dividends. This can make the TWS more attractive than the CEWS, as it creates immediate cash available, rather than having to wait for the government to pay the CEWS out. Eligible non-deferrable expenses include rent, property taxes, utilities and insurance. The pandemic situation continues to evolve and measures continue to be introduced and refined. Canada Emergency Business Account (CEBA) Posted June 17, 2020. The reference points for comparing revenue declines in the first four claiming periods is either the revenues from the same month in 2019, or the average revenues of January and February 2020. The CEWS and payroll refunds are taxable to the employer.
Eligible individuals have to apply for each 4-week period. The CEWS is Canada’s largest direct support program for employers who keep employees on their payroll and have suffered a decrease to gross revenues. The reference points for comparing revenue declines in the fifth to ninth claiming periods in computing the base subsidy is similar in computation to the first four periods, with some added flexibility. New applications can cover rent assistance from April to August 2020.
Please refer to the following webpage for further details and updates. Businesses that qualified for the CECRA for April, May, and June 2020 will automatically qualify for July, August, and September 2020. We have compiled a list of new measures as a quick reference to help any of your employees who require additional financial support during this challenging time. The CRA has published the following schedule summarizing revised due dates for income tax filings and payments.
Furthermore: The CEBA is interest-free until December 31, 2022. The overall wording of the statement on the CRA Website is less than clear but one message is - Dividend David can now be eligible for the CERB as his non-eligible dividends paid in 2019 and early 2020 can count towards the $5,000 pre-application income requirement. The COVID-19 pandemic has left many small businesses in Canada with no choice but to cut hours or close down entirely and in many cases lay off staff, leaving countless individuals and families in a precarious financial situation.
Employers are still required to collect and remit employee and employer contributions to EI, CPP, QPP, and QPIP.
Miles is also eligible for the CEBA loan. As part of measures to help Canadians manage through the COVID-19 pandemic, the Federal Government introduced numerous proposals. Please refer to the following webpage for more details as well as an online calculator.
If accepted, the CRA will then pay the CEWS to the employer as well as provide the potential payroll refund. The CRA will continue to accept and process retroactive applications for the final eligibility period that ended September 26, 2020. The CEBA will provide loans of $40,000 to qualifying Canadian operating businesses who require additional credit because of COVID-19. The agreement must include a moratorium on eviction and a declaration of rental revenue. If you didn’t repay 75% of the balance of the term loan (the balance on January 1, 2021) before December 31, 2022, the full loan balance and all unpaid interest would be due on December 31, 2025. This content is intended to provide business owners with high-level details on the measures. For more details on the TWS, please visit the CRA website. Businesses should contact their primary financial institutions for more information and to apply. Government of Canada website for the most up-to-date information. This means that more small businesses can access it. The TWS subsidizes 10% of remuneration paid from March 18, 2020 to before June 20, 2020 up to a maximum subsidy of $1,375 per employee and $25,000 per employer. The CECRA will provide loans to qualifying commercial property owners to cover 50% of monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship between April and September 2020. His annual gross revenues are generally $2,000,000/year. Dividend. Please contact us to learn how we can get more money in your pocket than in the government’s. Canada Emergency Business Account (CEBA) Amount. Eligible non-deferrable expenses between $40,000 and $1.5 million. Ordinarily, the business must also have had between $20,000 and $1.5 million in total payroll in 2019 to qualify. Furthermore: The CEBA is available to incorporated Canadian operating businesses. There are currently nine claiming periods confirmed for the CEWS covering the period between March 15, 2020 to November 21, 2020. In the first four claiming periods between March 15, 2020 and July 4, 2020, employers who are eligible for the CEWS will have 75% of their employees’ remuneration (salary, wages, and other amounts an employer is regularly required to withhold and remit to the CRA) covered by the government.
Businesses, including self-employed individuals, are now able to defer GST, HST, and QST payments until June 30, 2020. Businesses that do not qualify for the CEWS should review whether they qualify for the TWS, which is a separate wage subsidy program. There are also unique ways utilizing life insurance and critical illness insurance to access your retained earnings. The CERB is an income support program, primarily for individuals who involuntarily cease working because of COVID-19. The application process requires businesses to prove that their gross revenues have decreased by the required amount, and that they are currently paying their employees remuneration. Eligible individuals include the following: In other words, the CERB will still be available for individuals who may continue to work during the pandemic, but earn less than $1,000 a month. A separate online application form is also available. No further details have been provided on this extension. Member of the Canadian Investor Protection Fund, Self-employed individuals will still have until, Corporations that otherwise have a filing due date for their tax return after March 18, 2020 and before June 1, 2020 will have their return filing deadline extended to, Furthermore, the CRA has confirmed that they will not charge late-filing penalties as long as the return is filed by the extended payment due date of, The Quebec Parental Insurance Plan (QPIP), Workers who stop working due to COVID-19 and do not have access to paid leave or other income support, Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19, Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures, Workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work, Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance. The reference points for eligibility for the additional top-up subsidy available from the fifth to ninth claiming periods will be based on a 3-month revenue average. Under the rent forgiveness agreement, the commercial property owner would reduce the eligible small business tenant’s monthly rent by at least 75%, and the agreement will need to include a moratorium on eviction. On the application, the employer is required to designate someone who has principal responsibility over the financial activities of the employer to attest to the application.